GE inks $1 billion deal with Angola

Richard Lee

Published 12:44 am, Friday, June 6, 2014

Only a day after the U.S. Export-Import Bank authorized $1.1 billion to finance U.S. exports to sub-Saharan Africa, the Angolan government said Wednesday that it plans to buy trains and power generators valued at $1 billion from General Electric.

But a spokeswoman for the bank said Wednesday that the $1.1 billion in funding is not for financing the GE agreement.

The announcement of the Angola-GE deal and bank CEO Fred Hochberg's visit to the country is coincidental, according to Export-Import Bank spokeswoman Linda Formella, who reiterated that the $1 billion deal is not part of the bank's $1.1 billion funding package.

"There is no authorization at this time. It takes some time for a transaction like this to be approved by our board," she said.

A spokeswoman for Fairfield-based GE said she could not comment on the Angolan government's comments.

"GE looks forward to working in Angola to provide transportation and power solutions, said Jennifer Erickson, spokeswoman for GE Transportation. "We have a long-term relationship with Angola that dates back to 1967 and we look forward to furthering our relationship with the country."

Following Hochberg's three-day visit to the country, Angola's President Eduard Dos Santos said he supported the GE deal.

The bank already has approved funding of two Boeing 777 aircraft from the U.S., with the first arriving in 2015 and the second in 2016, through a partnership with Angolan Airlines.

The U.S. has instituted its Power Africa initiative, in which Ex-Im Bank will provide $5 billion to help fund private investment in energy projects across the continent.

The Export-Import Bank is committed to expanding U.S. trade with sub-Saharan Africa, home to seven out of 10 of the world's fastest growing markets, Hochberg said in a statement Tuesday.

"U.S. exporters are eager to realize the tremendous opportunities in this region, and the bank is helping them create and sustain American jobs by increasing their exports to Africa," he said.

The deal between GE and Angola aligns with an announcement by the U.S. Department of Energy that the government is launching a framework under President Obama's Power Africa initiative to increase energy access for underserved populations across sub-Saharan Africa. Over an initial five year period, Beyond the Grid will leverage partnerships with 27 investors and practitioners committing to invest over $1 billion into off-grid and small scale solutions for this underserved market.

"Beyond the Grid will help to expand the work the U.S. Government is already doing through Power Africa to bring electricity to citizens of sub-Saharan Africa," U.S. Energy Secretary Ernest Moniz said in a statement. "With close to 600 million people without access to modern-day electricity, it is clear that centralized grid access is not a comprehensive solution for these countries in one of the world's least urban continents. But through solutions including off-grid and small scale energy projects, we can bring electricity to these rural areas."

Brian Langenberg, principal in Langenberg & Co., said the deal pales in comparison to GE's $160 billion in annual revenue, commenting that the arrangement is mostly part of the company's global marketing strategy.